Note 11. Income Taxes

The components of the income tax provision for the years ended December 31, 2018 and 2017 are as follows:

	2018			2017

Current:
Federal	$	0		$	167
State		1			0
Deferred:
Federal		(9	)		(31	)
State		0			27
Total Federal and State Income Taxes	$	(8	)	$	163

The provision for income taxes for the years ended December 31, 2018 and 2017 differs from the amount obtained by applying the U.S. federal income tax rate to pretax income due to the following:

	2018			2017

Computed “Expected” Federal Tax Expense (Benefit From)	$	(4	)	$	156
Increase (Decrease) in Taxes Resulting From:
State Income Taxes, net of Federal Benefit		1			3
Credits		(41	)		(46	)
Domestic Production Activities Deduction		0			(19	)
Permanent Differences		7			4
Effect of U.S. Tax Law Changes (35% to 21%)		0			49
Other		29			16
Total Federal and State Income Taxes	$	(8	)	$	163

The components of the net deferred tax asset consist of:

	2018			2017

Deferred Tax Assets:
Vacation accrual	$	24		$	23
Allowance for doubtful accounts		2			2
Stock compensation		91			88
Bonus		0			2
Depreciation and amortization		29			17
Inventory Obsolescence		2			0
R&D credit carryforward		154			101
Valuation allowance		(81	)		(28	)
Total Deferred Tax Assets		221			205

Deferred Tax Liabilities:
Prepaid expenses		20			20
Net unrealized gain on investments		9			3
Total Deferred Tax Liabilities		29			23

Net Deferred Tax Asset	$	192		$	182

The Company is materially subject to the following taxing jurisdictions: U.S. and Minnesota. The tax years that remain open to examination by the Internal Revenue Service and state jurisdictions are 2015 through 2017. We have no accrued interest or penalties related to uncertain tax positions as of January 1, 2018 or December 31, 2018 and uncertain tax positions are not significant.